HeyTea Official: We Are Now Open to Franchising! A Great Value Opportunity!

For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat official account: cafe_style).

For more premium coffee beans, please add the private WeChat of FrontStreet Coffee, WeChat ID: qjcoffeex

Heytea Opens Franchise Opportunities

On November 3rd, media reported that Heytea will open franchising opportunities! This comes shortly after closing the last store of their sub-brand Heyxia Tea, and now they are following up with opening franchising.

According to Heytea's latest official announcement, the partnership fee for Heytea's business franchise will be under 500,000 RMB. This is not significantly different from the starting investment costs of 350,000-400,000 RMB for other brands in the industry. Unlike Heytea's previously opened large stores, this time Heytea has emphasized "appropriate store formats" in their externally confirmed information. The franchised stores will mainly focus on areas under 50 square meters.

Job recruitment websites show that Heytea has already posted a position called "Heytea—Business Partnership Management Manager," specifically responsible for connecting and following up on investment promotion and customer management work, as well as tracking the speed of partner store openings and providing support for business partnership companions. The job qualifications clearly state that applicants must have more than three years of experience in franchise management for well-known chain brands.

Currently, multiple media outlets have confirmed from Heytea that Heytea is indeed preparing to open franchising opportunities. To allow more customers to enjoy Heytea's products faster and experience their quality, Heytea will rely on the experience, capabilities, and resources accumulated over the past decade to launch business partnership operations in non-first-tier cities with appropriate store formats, building on the comprehensive implementation of the store partnership mechanism across all nationwide stores. They will provide support to business partners in terms of branding, products, quality control, food safety, operations, training, and supply chain.

Marketing expert Tang Li frankly stated: "Heytea has not received new funding for a long time and failed to list on the Hong Kong stock market as hoped this year. Opening franchising not only opens up lower-tier markets for Heytea but also alleviates their financial burden."

Heytea's Development History

According to publicly available information, Heytea originated in Jiangmen City, Guangdong Province, opening in 2012 under the original name ROYALTEA. Due to inability to register the trademark, it was comprehensively upgraded to the registered brand HEYTEA in February 2016 and entered the Beijing market in August 2017. It has always operated in a directly-managed format, insisting on using real milk, real fruit, real tea, and real sugar to create truly quality products that are not expensive. Currently, it has opened more than 800 stores in nearly 70 cities worldwide, with the number of stores in cities like Shanghai and Shenzhen exceeding one hundred.

In the new tea beverage industry, besides Heytea, brands like Nayuki and ChaYanYueSe have also insisted on direct management. Compared to the franchise model, direct management is indeed smoother, but the number of stores is mostly maintained at a few hundred, while brands primarily based on franchising basically have over a thousand stores. According to the prospectus previously released by MIXUE, MIXUE has over 20,000 stores, Guming has over 6,600 stores, Shuyi Xiancao has over 6,500 stores, and ChaBaiDao has over 5,800 stores.

Market Strategy and Future Outlook

In recent years, the trend of new tea beverage market expansion into lower-tier cities has become increasingly apparent. Perhaps to capture the market in third and fourth-tier cities, Heytea has been frequently making moves, including price adjustments, collaborations, launching transparent windows for real fruit peeling, conducting the "Axi" full-body征集 contest, closing the affordable sub-brand Heyxia Tea, and now opening franchising opportunities... After opening franchising, will the new tea beverage industry usher in a new round of intense competition?

In early February, Heytea announced the completion of comprehensive price adjustments, with stores in many regions across the country experiencing overwhelming orders. Until June this year, products under 19 RMB on Heytea's menu accounted for 80%. At the same time, this year Heytea has also launched various collaboration activities with IPs such as Hiroshi Fujiwara, "A Dream of Splendor," "Genshin Impact," and "The Legend of Zhen Huan," continuously enhancing brand momentum.

Heytea's collaborative special products with the popular drama "A Dream of Splendor" sold nearly 300,000 cups on the first day of launch, with the highest single-store sales reaching around 1,000 cups. Heytea's collaboration with "The Legend of Zhen Huan" was immediately sold out upon release. As the first new tea beverage brand to collaborate with the national-level TV drama "The Legend of Zhen Huan," this collaboration once sparked netizens' creative enthusiasm, forming a very strong brand differentiation.

According to Heytea's official data, in the past few years, Heytea's store expansion speed has significantly slowed. In 2018, the number of stores was 163; in 2019, it was 390, with a growth rate of as high as 139%; in 2020, another 320 stores were added, with a growth rate of 78%; in 2021, the number of new stores was 202, with a growth rate of only 26.3%, showing a year-on-year decrease in store growth.

Is Heytea now opening franchising to quickly capture lower-tier markets? The problems and challenges of lower-tier markets cannot be underestimated. Whether Heytea can break through in lower-tier markets with the franchise model remains to be verified by the market. However, having said that, Heytea has opened franchising opportunities—will Nayuki, also a representative of direct management in the new tea beverage industry, be far behind?

Image source: Internet

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473